How To Get Out of Debt


For many people debt can be a major concern and over the past few years the problem has been getting worse in the UK. At the end of 2017, the average household owed around £13,000, excluding mortgages. Credit has been so easy to come by that we are consuming way beyond our means. Unfortunately, schools do not teach enough about the dangers of debt and therefore many people only find out how damaging it can be when it’s too late. If you find yourself in this position, here are a few steps to help get debts under control (and eventually cleared).

Curb spending

The first and most important step to reduce debt is to gain control of your spending in order to prevent debts increasing further. This can be difficult in the “buy now, pay later” era we are in but if you can’t control your spending then you will forever be in debt. Look back at though your credit card and bank statements to see what you are spending most on. Get out of the consumer habit of constantly buying new things and start being more money conscious. How many of your purchases were worthwhile? What could you have bought second-hand instead? Which items would you get a refund for if you had the chance? Once you have reviewed your spending habits, start looking at ways to save money by reducing monthly spending.

Review interest terms

If you are stuck on a high rate of interest then it can take a very long time to pay off debts. When you first started incurring the debt it may have been at 0% interest but if the interest free period expires before the debt is paid off then you will most likely be paying an extremely high rate of interest. To get out of debt quicker, find out what you are paying in interest as soon as possible. One you know what you are paying, see if you can move part or all of the debt onto a credit card with 0% on balance transfers. Even if you can only do this on a portion of the debt it’s still better than paying high interest rates on the full amount owed. When interest is working for you it’s a wonderful thing but when it’s working against you it can be crippling. Make it your aim to pay as little interest as you possibly can (ideally zero!).

Make a repayment plan

Now that you have your spending under control and you have reviewed the level of interest you are paying, you should make a plan to pay back what you owe as quickly as you can. The quicker you pay off your debts the sooner you can start building up savings and swap liabilities for assets. Set up a direct debit so that automatic payments come out of your bank account each month. If you leave it to choice you may be tempted to pay a lower amount. Take care of your debts first then work with what’s left for the rest of the month. If you go month-to-month paying the minimum amount possible then you will be in debt for a long time. If you are serious about paying off your debts then it will involve sacrifices but it will be worth it in the long run.


Being in debt can be a real concern and can often lead to stress and anxiety. However, you can take control of the situation by reviewing your spending habits and working out a plan to pay off your debts. Don’t forget to pay close attention to how much interest is being added onto the debt. High rates of interest will make it more difficult to pay off debts so look into what can be done to reduce them. By following the steps above you will certainly be on the right track to clearing your debts and in time you may even be able to start investing.

For those in need further help, charities such as Step Change provide fantastic information and support to people struggling with debts.

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